Summary
Starbucks Corporation's Q1 FY2007 filing (period ending December 30, 2006) demonstrates robust top-line growth, with total net revenues increasing by 22% year-over-year to $2.36 billion. This growth was primarily driven by the expansion of Company-operated retail stores, a 6% increase in comparable store sales, and continued strength in its licensing and foodservice segments. The company opened 728 new stores during the quarter, signaling an aggressive expansion strategy with plans for 2,400 new stores in fiscal 2007. Net earnings rose 18% to $205 million, or $0.26 per diluted share, although operating margins slightly compressed due to increased costs in cost of sales, occupancy, and store operating expenses. Despite margin pressures, the company's strategic focus on global growth and operational execution appears to be yielding positive financial results for investors.
Key Highlights
- 1Total net revenues increased 22% to $2.36 billion for the 13 weeks ended December 31, 2006, compared to $1.93 billion in the prior year period.
- 2Net earnings grew 18% to $205 million, or $0.26 per diluted share, up from $174 million, or $0.22 per diluted share, in the comparable prior year period.
- 3Company-operated retail revenues increased 23% to $2.01 billion, driven by 1,177 new store openings in the last 12 months and a 6% increase in comparable store sales.
- 4Specialty operations (licensing, foodservice) saw a 14% revenue increase to $349 million.
- 5Starbucks opened 728 net new stores globally in the quarter, with plans to open approximately 2,400 new stores in fiscal 2007.
- 6Operating income margin slightly decreased to 13.6% from 14.5% year-over-year, primarily due to higher cost of sales and store operating expenses.
- 7The company repurchased approximately $115 million of its common stock during the quarter as part of its capital management program.